by Dale J. Giali
The most recent census confirmed what many people already knew: Our country is diverse and getting more so. Nearly 25 percent of the U.S. population is now nonwhite-and by 2050 racial minorities will likely constitute the majority. And, of course, our economy's strong connection to the global marketplace is only getting stronger. Yet disparity in the representation of women and minorities in the workplace remains.
The legal profession is no exception. In a 2000 report, the American Bar Association Commission on Race and Ethnic Diversity described the legal profession as the least integrated profession in the country. Little had changed by 2004, when the ABA released another report, concluding that minorities were less likely than whites to work at private law firms, more likely than whites to leave a firm after three years, and vastly underrepresented in the positions of general counsel and law firm partner. (See generally, www.abanet.org/minorities/publications.) Even the ABA itself, which was founded in 1878, did not elect its first female president, Roberta Cooper Ramos, until 1995 and its first black president, Dennis Archer, until 2003.
But with diversity spotlighted, bar associations, law schools, law firms, and in-house legal departments have refocused attention on increasing the number of women and minorities in the profession through hiring, retention, promotion, and advancement to leadership positions.
Calls to Action
Diversity initiatives in the legal profession are not new, and many have been sponsored by the in-house legal community. In 1992 DuPont considered the diversity of a law firm's attorneys as a factor in hiring decisions. By 1995 American Airlines had a Minority Corporate Counsel Program, focusing on diversity within the law firms it used. In 1999 the general counsel of BellSouth issued a document titled "Diversity in the Workplace: A Statement of Principle," which espoused advancing diversity in corporate legal departments and law firms. More than 400 corporations signed the statement.
Recently the call for diversity has taken on a new fervor. Not satisfied with the incremental advances he observed, the general counsel of Sara Lee in the spring of 2004 drafted "A Call to Action: Diversity in the Legal Profession," challenging corporate legal departments and law firms to improve their efforts in hiring and retaining women and minorities and asking signatory corporations to "end or limit relationships with firms whose performance consistently evidences a lack of meaningful interest in being diverse." Within six weeks, general counsel from 60 companies had signed on, and a website that was launched shortly thereafter now lists 95 member companies. (www.CLOCalltoAction.com.)
In June 2005 Wal-Mart went further, announcing that at least one person of color and one woman must be among the top five relationship attorneys from each firm that handles its business. Noncompliant law firms risk being cut off from Wal-Mart's legal work. Within four months, Wal-Mart had changed 40 of the relationship partners at its top 100 law firms-from a "nondiverse" to a "diverse" attorney. Other companies, such as Visa International, Del Monte, and Pitney Bowes, also require outside counsel to demonstrate diversity at the upper levels of the firm.
For decades diversity campaigns likewise have been sponsored by local and national bar associations. The Bar Association of San Francisco, the Los Angeles County Bar Association, and the American Bar Association are just a few that have formed task forces and published statements on diversity principles and goals. The Los Angeles County Bar Association urges law firms to support the goal of hiring "entry-level classes that substantially reflect the diversity of graduating law students" by the year 2008. (Los Angeles County Bar Ass'n, 2005 Statement of Diversity Goals and Principles, sect; II.)
Law firms are also active. Many firms have diversity committees and a designated partner in charge of diversity issues. They have sponsored summits to discuss the state of diversity in the profession and to exchange best practices for increasing the numbers of underrepresented classes.
However, in its February 2006 Goal IX Report, the ABA provided a sobering summary of the meager results of diversity efforts: "Minority representation accounts for only 9.7% of all lawyers. While this is an increase of 2.1% since 1990 ... , it is still far from reflecting minority representation in the general population."
The number of women in the profession likewise lags behind their percentage of the general population. And these disparities are more pronounced in senior-level positions. In 2004, for example, women accounted for only 17 percent of law firm partners, and minorities accounted for only 4 percent.
Laws on Gender and Race
These diversity initiatives are designed to overcome the effects of past discrimination and otherwise correct the underrepresentation of women and minorities in the legal profession. But to some degree-some have argued a large degree-campaigns focused on increasing diversity are at odds with the law, which has as its goal equal opportunity and nondiscrimination in the workplace. In other words, discrimination, whether in the name of diversity or otherwise, is unlawful. This tension requires understanding the legal principles that apply to programs designed to increase diversity in the profession.
Laws protecting equal opportunity and nondiscrimination relating to race and gender preferences in the private sector have developed in both the federal and state systems. The primary laws protecting California employees from such discrimination are Title VII of the Civil Rights Act of 1964 (Title VII) (42 U.S.C. § 2000 and following); section 1981 enacted as part of the Civil Rights Act of 1866; and California's Fair Employment and Housing Act (FEHA) (Cal. Gov. Code §§ 1290041).
This article discusses the laws on preferences in the workplace based
on race and gender that are relevant to affirmative diversity programs seeking to increase the number of women and minority lawyers. It does not address laws prohibiting other types of workplace discrimination, or the specific laws prohibiting the state, as opposed to private actors, from discriminating or granting preferential treatment based on race, sex, color, ethnicity, or national origin. (Cal. Const., art. I, § 31.)
Title VII prohibits an employer from hiring, firing, or otherwise discriminating against any individual "with respect to compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin." (42 U.S.C. § 2000e-2(m).)
Title VII protects all races equally. (McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 27880 (1976).) And a claim is established if race or sex was a factor in an adverse employment decision. (Rhodes v. Guiberson Oil Tools, 39 F.3d 537, 544 (5th Cir. 1994).) It is also unlawful to publish a notice indicating any preference, limitation, or specification based on race or sex-unless it involves a bona fide occupational qualification, such as the Radio City Rockettes seeking only women. (42 U.S.C. § 2000e-3(b).)
The law applies to employers with 15 or more employees that have at least a minimal impact on interstate commerce. (42 U.S.C. § 2000e-2.) Employees, applicants, and former employees are covered. (42 U.S.C. § 2000e-2(a)(1) and (2); Robinson v. Shell Oil Co., 519 U.S. 337, 34546 (1997).) The law caps compensatory and punitive damages, though not back pay or reinstatement pay, according to the employer's size: $50,000 for employers with up to 100 employees, all the way up to $300,000 for employers with more than 500 employees.
Law firms are subject to Title VII, and a firm's promotion decisions-including whether to elevate an associate to partner-can be a "term, condition, or privilege of employment" covered by Title VII, even if such a promotion is not a contractual right. (Hishon v. King & Spalding, 467 U.S. 69 (1984).)
Title VII also prohibits interfering with another person's employment opportunities in a way that discriminates-even if the one who interferes is not the employer. (Gomez v. Alexian Bros. Hosp., 698 F.2d 1019, 1021 (9th Cir. 1983) (allegations of a hospital demanding fewer Hispanic doctors from the independent company holding the emergency room contract was sufficient to allege a Title VII violation against the hospital.) But discriminatory biases of a client who demands that an employer terminate an employee are not imputed to the employer. (Brownlee v. Lear Siegler Mgmt. Servs. Corp., 15 F.3d 976, 977 (10th Cir. 1994).)
To initiate a Title VII claim, an individual must first file a complaint with the Equal Employment Opportunity Commission, which pursues a small number of cases on its own-or issues a right-to-sue letter authorizing a private lawsuit.
Section 1981 provides that all people have the same right in every state "to make and enforce contracts ... and to the full and equal benefit of all laws ... as is enjoyed by white citizens." (42 U.S.C. § 1981(a).) This provision was enacted as part of the Civil Rights Act of 1866, shortly after the Civil War. The law was designed to vindicate the protections enacted by the 13th, 14th, and 15th amendments to the Constitution. Section 1981 was amended in 1991 to confirm that its protections apply not only to the formation of new contracts but to the "making, performance, modification, and termination of contracts, and the benefits, privileges, terms, and conditions of the contractual relationship." (42 U.S.C. § 1981(b).) This amendment overturned the holding in Patterson v. McLean Credit Union (491 U.S. 164, 17678 (1989)) that section 1981 did not apply to an employer's conduct after the employment relationship was established. (Lauture v. IBM, 216 F.3d 258, 260 (2d Cir. 2000).)
Among the contractual relationships subject to section 1981 are those relating to employment. (Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 45960 (1975); Lauture, 216 F.3d at 264. "At will" employees have sufficient "contractual" rights vis-a-vis their employers that they may bring claims under section 1981. (Skinner v. Maritz, Inc., 253 F.3d 337 (8th Cir. 2001).)
Although it overlaps with Title VII, section 1981 provides a separate and independent claim for race discrimination on the job. (Johnson, 421 U.S. at 461; Lauture, 216 F.3d at 264.) Both Title VII and section 1981 require "proof of discriminatory treatment, and the same set of facts can give rise to both claims." (Fonseca v. Sysco Food Servs. of Ariz., Inc., 374 F.3d 840, 850 (9th Cir. 2004).) Section 1981 affords to employees of all races "protection from racial discrimination in private employment." (McDonald, 427 U.S. at 276, 287.)
Section 1981 can provide a more favorable avenue for relief for plaintiffs subject to race discrimination than Title VII because there is no cap on damages, there may be a longer statute of limitations, and the law applies to employers of any size. Moreover, there is no need to file a charge with an administrative agency, as there is with Title VII and FEHA claims.
With some differences in wording and an expansion of protected classes, California's FEHA follows federal antidiscrimination laws and provides protections similar to Title VII. (Guz v. Bechtel Nat'l, Inc., 24 Cal. 4th 317, 354 (2000).) The FEHA prohibits an employer from taking any adverse action based on an individual's race; religious creed; color; national origin; ancestry; physical or mental disability; medical condition; marital status; sex; sexual orientation; age (40 and over); or pregnancy, childbirth, or related medical condition. (Cal. Gov. Code §§ 12926(j), 12940(a), 12941, and 12945.) The state's FEHA also requires an employer to take "all reasonable steps necessary to prevent discrimination." (Cal. Gov. Code § 12940(k).)
The FEHA's antidiscrimination provisions apply to all employers with five or more employees. (Cal. Gov. Code § 12926(d).) It proscribes outsiders from aiding, abetting, inciting, compelling, or coercing an employer to engage in discriminatory practices. (Cal. Gov. Code § 12940(i); Alch v. Superior Court, 122 Cal. App. 4th 339, 389 (2004).) As with Title VII, the protections flow to employees, applicants, and former employees. (Sada v. Robert F. Kennedy Med. Ctr., 56 Cal. App. 4th 138, 159 (1997).) Also, similar to Title VII, a plaintiff must first exhaust administrative remedies through the Department of Fair Employment and Housing before filing a lawsuit.
An employer who discharges an employee at the behest of a biased client does not violate the FEHA unless the employer itself harbors discriminatory intent. (West v. Bechtel, 96 Cal. App. 4th 966, 97980 (2002).)
Although the state and federal laws discussed above generally prohibit employers in the private sector from considering race and sex in employment decisions, there is a narrow exception to this rule. A private employer may use preferences involving a defined voluntary plan designed to remedy a manifest imbalance of representation in "traditionally segregated job categories"-but only when the affirmative-action plan is temporary and does not "unnecessarily trammel" the rights of those not provided the preference. (See, United Steelworkers v. Weber, 443 U.S. 193 (1979); Johnson v. Transportation Agency, 480 U.S. 616 (1987).)
Absent a "manifest imbalance," an affirmative-action plan will not survive legal scrutiny. When-as in the senior-level positions in the legal profession at issue in many of the current diversity initiatives-a job requires "special training," the manifest-imbalance element can be shown only through an analysis of the ratio of those who have the special training for the position to those who actually hold the position. (Johnson, 480 U.S. at 63132.) Affirmative action also may be an appropriate remedy for violation of nondiscrimination laws. (Local 28 of Sheet Metal Workers' Int'l Ass'n v. EEOC, 478 U.S. 421, 445 (1986).)
Given the limitations of the qualified, narrow affirmative-action efforts recognized by the law, this exception appears unlikely to provide a method to increase the representation of women and minorities in the legal profession. And while the U.S. Supreme Court has recently confirmed that "student body diversity is a compelling state interest that can justify the use of race in university admissions" (Grutter v. Bollinger, 539 U.S. 306, 325 (2003)), increasing diversity in the workplace alone is not a legally sufficient basis to support race or sex preferences in employment decisions. Statistical analyses showing an underrepresentation of minorities is, likewise, an insufficient basis under the law.
However, cases recognize the legality of increasing an applicant pool to include those who are underrepresented. (Davidson v. Time, Inc., 972 F. Supp. 148, 15354 (E.D.N.Y. 1997) (employer legally hired an executive search firm to identify minority applicants for position); Duffy v. Wolle, 123 F.3d 1026, 103839 (8th Cir. 1997) (employer's affirmative efforts to recruit minority and female applicants does not constitute discrimination).)
Dale J. Giali (firstname.lastname@example.org) is a partner in the Irvine office of Howrey, specializing in commercial and antitrust litigation.